November 30, 2022

Trade worries show the way: fresh tariffs, no talks

LQDFX Forex news blog: Trade worries show the way: fresh tariffs, no talks

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European markets, Asian markets, US stock index futures have in common that they were hit by investors’ concerns about the escalating trade war. The pessimism among the traders is widespread. Trade worries increase following China’s accusations against Trump’s administration the United States of “trade bullying”.

USA and China imposed fresh tariffs to each other which came into effect in the morning. Tariffs are estimated at 10% on $200 billion worth Chinese imports and 5% or 10% on $60 billion U.S. imports, respectively. None of the two economic giants seems to back off their hard stance.

Financial experts predict that an elongated conflict will eventually hurt global growth and economy. Forex analysts warn that there is a risk that China may “let” their currency to weaken on purpose. They also underline that the trade war will not recede in the near future, so traders may focus on other issues instead. Markets are volatile as traders’ sentiment is hurt by the political and economic uncertainty.

China’s decision not to proceed in talks with the USA caused further fear and instability.

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Forex Market – Trade worries – prime concern

The Dollar traded lower, extending its 2-week losses. The greenback dropped 0.2% against its major traded rivals ahead of Fed interest hike.

The Euro edged higher 0.2% and the Sterling rose more than 0.7%. Last Friday the pound fell 1.5% on Brexit concerns following the rejection of May’s Brexit Plan by the EU leaders and ahead of her forthcoming statement.

Oil prices soared at 4-year high, more than 2% after OPEC meeting and its decision not to increase output. U.S. President Trump’s provocation to OPEC to “get prices down now!” probably was rather a disincentive. Brent crude futures increased by 2 dollars and 14 cents a barrel, above 80$ per barrel. U.S. crude futures gained 1 dollar and 35 cents from their last close.

Sources: Reuters, CNN money, BBC

PLEASE NOTE The information above is not investment advice.